Faith in intuition and behavioral biases

Carlos Alós-Ferrer and Sabine Hügelschäfer

Journal of Economic Behavior & Organization, 2012, vol. 84, issue 1, 182-192

Abstract: We use a 15-item self-report questionnaire known as “Faith in Intuition” to measure reliance on intuitive decision making, and ask whether the latter correlates with behavioral biases involving a failure of Bayesian updating. In a first experiment, we find that higher report scores are associated with an increased use of the representativeness heuristic (overweighting sample information). We find no evidence of increased conservatism (overweighting prior information). The results of a second experiment show that more intuitive decision makers rely more often on the “reinforcement heuristic” where successful decisions are repeated even if correctly updating prior beliefs indicates otherwise. However, this effect depends on the magnitude of incentives.

Keywords: Behavioral biases; Bayesian updating; Intuition; Representativeness; Conservatism; Reinforcement (search for similar items in EconPapers)
JEL-codes: C91 D80 J24 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:84:y:2012:i:1:p:182-192

DOI: 10.1016/j.jebo.2012.08.004

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